UK News Global shares tracker is beating my Isa of investment trusts and ETFs

09:50  29 april  2021
09:50  29 april  2021 Source:   dailymail.co.uk

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The revamped Temple Bar investment trust and a US value stocks ETF are further attempts to get some exposure to value and cyclicals. They will hopefully not make me wish I’d just opted for a FTSE 250 index tracker . All of which is starting to make that global equities ETF look more attractive by the day. So since December, I’ve been drip-feeding a small amount each month into bitcoin and ethereum using an app called Ziglu. As of the end of the first quarter this was nearly 30 per cent up and equivalent to about 7 per cent of my Isa fund. What next?

A stocks & shares ISA is very different from a cash ISA , which is just a savings account you never pay tax on. If this is your first experience of investing , read our Beginners' guide to investing to get a broader idea of what's involved. Investing is for the long term, so a cash ISA would be best. If you can put some of your money away for at least five years, you could split it between a cash and a stocks & shares ISA .

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Equities began the year pretty much where they had left off in 2020 - in a 'buy everything' bull market.

Despite some wobbles before Christmas, growth shares made further gains in the first few weeks of the year alongside the recovery trade in value and cyclical stocks. My magpie Isa was 25 per cent up over six months at one point.

Then the wheels came off.

Bond markets started to throw a tantrum about the US Federal Reserve apparently not taking inflation seriously enough, and prices slumped as yields soared.

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Highly strung markets started to price in rate rises on the less-distant horizon, and the shine came off highly-valued growth stocks that had soared in 2020, including technology, biotech and clean energy firms and funds.

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When you invest in a fund, investment trust or ETF , your cash is used to buy a selection of investments that usually focus on a particular theme, specific industry or geographical area. Barclays Investment Solutions Limited provides wealth and investment products and services (including the Smart Investor investment services) and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange and NEX.

This ETF scores every company on various ethical, social and governance standards and then kicks out sectors with a negative social or environmental impact like gambling or alcohol. The ETF costs 0.48 per cent. To reduce the risk of investing abroad this ETF is hedged into sterling. In the long-term, the king of investments is equities, but we know they can be very volatile and they are not for everyone, so more cautious investors hold bonds and accept a lower return for a less bumpy investment ride. This ETF invests in high grade government and corporate bonds, what we call 'supranationals', like the

My pick'n'mix thematic Isa rapidly went from - at the time of my first article in the New Year - 20 per cent up since its August opening, to less than 4 per cent, while global stock markets gyrated a bit without suffering any major correction.

Then equities resumed their gains but led this time by value and cyclical stocks, as vaccines were successfully rolled out, began to work, and facilitated a firm reopening schedule for businesses and life in general.

The Isa recovered a bit towards the end of the quarter in spite of, it has to be said, rather than because of some of the choices I'd made in the meantime.

So by 7 April it was showing a gain since inception of nearly 10 per cent.

L&G BATTERY VALUECHAIN ETF (BATG) 7.7% 15-Sep-20 47.0%
EDINBURGH WORLDWIDE IT (EWI) 7.3% 11-Aug-20 28.0%
JPMORGAN CHINA GROWTH IT (JCGI) 7.0% 11-Aug-20 29.5%
SCOTTISH MORTGAGE IT (SMT) 7.0% 11-Aug-20 33.2%
BIOTECH GROWTH IT (BIOG) 6.3% 11-Aug-20 12.0%
GOLDEN PROSPECT IT (GPM) 4.2% 11-Aug-20 -20.5%
HERALD IT (HRI) 3.7% 26-Jan-21 -8.3%
MOBIUS IT (MMIT) 3.6% 15-Dec-20 10.4%
JPMORGAN JAPANESE IT (JFJ) 3.0% 15-Dec-20 -8.5%
ISHARES MSCI KOREA ETF (IKOR)2.9% 19-Jan-21 -4.4%
TEMPLE BAR IT (TMPL)2.7% 15-Mar-21 0.1%
PACIFIC HORIZON IT (PHI) 2.5% 13-Nov-20 19.4%
L&G CYBER SECURITY ETF (ISPY) 2.4% 15-Sep-20 12.3%


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Tracker funds and ETFs are ideal for those who want to invest but don't want the hassle of picking shares or cost of a fund manager, who is unlikely to outperform the market. But it can also be a more esoteric basket of investments that fit certain criteria, such as the highest-yielding shares on a country's stock market or those are considered to have a factor such as value, momentum or quality. Tracker funds are the name usually given to those that work like investment funds (called Oeics and unit trusts in investing jargon), while ETFs are traded on stock exchanges like ordinary shares .

A Stocks and Shares ISA gives you the freedom to invest in a wide range of investments , including funds and UK and international shares and bonds. You can also hold cash, so you can secure your valuable tax break now, and then chose the investments when you’re ready. Invest monthly into your choice of funds, FTSE 350 shares , selected investment trusts and exchange-traded funds ( ETFs ). You can start, stop, increase and decrease your Direct Debit whenever you like. Log in to your account and choose the 'Monthly savings' tab to get started.


CRYPTOCURRENCIES= c.7% of Isa total

Monthly from

Dec 2020

Cryptocurrency is held outside of an Isa, as it cannot currently be held in one

Not bad then, but to put it in perspective: global equities, as reflected in the Invesco MSCI World ETF, rose nearly 16 per cent in the same period. The Vanguard LifeStrategy 100% equity fund performed similarly.

Although that, of course, is how a lump sum invested at the start of the period would have performed, whereas I have been drip-feeding - which in a steadily rising market is less rewarding.


... is what many grizzled investors glancing at the table of my portfolio will be exclaiming. 'This man needs to make up his mind and be selective!' And to that I'd say several things, the first of which is, 'Yes, you're right.'

Second, however, trading fees aren't making a huge difference. In the case of my platform they are low, at £5 a purchase.

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Why use a global tracker ? The idea behind using global trackers is relatively simple There’s one further dividend-related drawback if you hold this ETF outside of an ISA or SIPP, as I More recently, a weaker pound and the strong-performing US market has driven the VWRL share price to around £65. Seven out of twenty trusts in the global sector for investment trusts beat that on a net asset

‘Clearly investing in India is an indirect bet on a low oil price given its position as a global consumer rather than producer. If you believe the price of oil is about to rocket then clearly you wouldn't necessarily want to be left holding Indian equities. ‘Investors wanting direct exposure to Indian However, those who invest consistently over time may one day be surprised at how much those investments are worth and holding them in a tax-free wrapper makes sense. This is because if they opt to sell all or a large amount of their investments at one time and they are not held in an Isa , then they

That would apply whether I bought the same thing every month or different things. To minimise trading costs, I'd buy just one thing every month (which might be sensible, instead of two or three), and not sell anything.

Third, if you've identified a theme or a sector or a geography, I don't see the harm in having more than one vehicle to represent it, depending on how much of the portfolio it comprises. They might have different approaches, different holdings; you might have one active and one passive.

You are hedging your bets, yes, but it's also another level of diversification.

Fourth, overlap: I don't really see the issue as long as you are aware of it, and happy with the resulting exposure.

TenCent and Alibaba are the most replicated shares, with both appearing in six of my vehicles. But the former stock makes up just 1.85 per cent of my portfolio, and the latter only 1.26 per cent.

Still, it's far from clear whether 'trying to be clever', and picking sectors that I think will do better than average, will achieve higher total returns.

I also paid significantly more in fund fees - averaging out at 0.89 per cent - than the Invesco ETF's 0.19 per cent ongoing charge.

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The caveat to this 'underperformance' of course is that I am investing for the long term, and the Isa shouldn't be judged on a quarter-to-quarter basis.

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But there is room for short and medium term-judgements and tactical adjustments, even in a long-term project.

Would I make more over 10 years by just buying a global equities tracker every month? Well it's a moot point, but it wouldn't be much fun would it?

And it certainly wouldn't make for an interesting series of articles.

As long as I stand a chance of doing better than the average, I'll give it a go.

Disposals and acquisitions

I read so many alarming articles in early January predicting a big correction in tech stocks, that I decided to trim my excessive exposure by getting rid of two of the tech-orientated trusts I held, Polar Capital and Allianz.

I made a decent profit on them and used the money in part to buy into more value-orientated vehicles. But in truth most of my purchases in this quarter came a bit of a cropper.

Attempts to get extra exposure to Vietnam and South Korea slumped into the red almost immediately - as did my Japan investment trust bought in December.

I thought Herald investment trust would be a sensible bet given the great prospects for UK smaller companies but it was hit by the tech sell-off.

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Most irritating of all was my choice for extra exposure to the renewables sector, beyond my holding in the volatile iShares Clean Energy ETF. I agonised over the various investment trusts in the sector and some of the other ETFs.

A week after I plumped for the Premier Miton Global Renewables Trust, it had fallen by 20 per cent.

Yes investing is a marathon not a sprint, but it hardly helps if you start off up to your waist in a bog.

The irony is that one of the reasons behind the sudden drop in PMGR might well have been washback from a restructuring of the huge iShares ETF.

More successful was my play on the commodities super-cycle, with BlackRock World Mining Trust going in the right direction. But, never one to buy one fund when there are two available, I also went for BlackRock's sister trust, Energy and Resources Income, which so far has fared less well.

The revamped Temple Bar investment trust and a US value stocks ETF are further attempts to get some exposure to value and cyclicals. They will hopefully not make me wish I'd just opted for a FTSE 250 index tracker.

All of which is starting to make that global equities ETF look more attractive by the day.

Cryptocurrency corner

Wanting some more diversification away from equities than my gold punt, I decided to start a small crypto-currency fund. The FCA has seen to it that crypto exchange traded products aren't offered by UK investing platforms - and even if they were they might not be allowed in an Isa.

So since December, I've been drip-feeding a small amount each month into bitcoin and ethereum using an app called Ziglu. As of the end of the first quarter this was nearly 30 per cent up and equivalent to about 7 per cent of my Isa fund.

What next?

In a further diversification I'd like to add a couple of property-related vehicles, and some more income-focused products.

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